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Risky Business? Conquering the hidden cost quandary.
By Dan Weedin, CIC
Why risk management? Don’t you have enough to worry about running your business? Isn’t that why you buy insurance in the first place, to pay for all those unexpected accidents?
Many of you may feel this way, but I urge you to stay with me on this and find out how such attitudes can get you nailed with hidden costs.
Hidden costs will eat away at your bottom line when you have insurance claims.They will rob you when you’re fined for non-compliance. And they will wreak havoc when your operations don’t run at full speed. Few talk about the hidden costs that you’ll be left to cover on your own: things like your (or your manager’s) time to manage the paperwork and red tape, the loss of use of vehicles or equipment that hampers work rate, and the potential loss of reputation.
Let’s look at three reasons you should make conquering the dilemma of hidden costs a priority:
- The dreaded visit from OSHA – or your state-run safety and health administration agency. When they walk in and ask to see your safety manual and you have to dust it off or, worse yet, don’t have one, pull out your checkbook.
- Reduced Workers Compensation costs – Reductions in the frequency and severity of employee injuries are the by-products of a sound safety program. Not only is that good news for your employees and your productivity, it’s also great news for your Workers Comp premium.
- An ounce of prevention – Just like your doctor and dentist always tell you, preventive measures lead to better health. That’s true for your business, too. Proper risk management includes a clean work environment, sufficient security measures (such as fencing, exterior lighting, and alarms), and safety standards for your workplace and vehicle operation. As with Workers Comp, better loss experience – which means fewer losses – will have a positive impact on your insurance rates. If you’re still reading, that must mean you’re interested in improving your company’s chances and bottom line through good risk management. With that in mind, here are some questions you need to ask yourself:
- Who is responsible for safety in your organization?
- How often do you hold safety meetings? Are they documented?
- If asked, would all of your employees know what MSDS are, where to find them, and how to use them? Do you know what MSDS are? **
- What kind of written standards do you have for workplace safety? Fleet safety?
- Do you know where your safety manual is? Do your employees?
- What would happen if OSHA walked through your doors tomorrow?
Your answers to these questions should allow you to sleep at night. If some or all make you nervous, now is the time to take control of the risks associated with your business operation. The health of your business and the well-being of your employees are much too valuable.
**Note – In case you don’t know, MSDS stands for Material Safety Data Sheets. They are a key component of the Hazardous Communication Standard (or Right to Know Law) mandated by the Federal Government. MSDS detail the inherent risks in products that you use or sell to the public. That is a whole separate issue for another article! For more information on MSDS, go to www.msdsonline.com.
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